Mayskoye is one of the top five largest gold deposits in Russia. It is located in the far North-East of Russia in the Chukotka region, 180 kilometers from the town and the sea port of Pevek.

There are no audited reserve estimates for Mayskoye prepared under JORC guidelines. The most recent statutory Feasibility Study approved by the GKZ in 2002 estimated economic reserves (C1 + C2) of the deposit at 22.7 Mt of ore with the average grade of 10.9 g/t for 248 tons of contained gold.

The previous owner of the Asset commenced construction on site with an access road, accommodation camp, and heated maintenance/storage facility completed. Work started on the construction of the power line connecting the site with the regional grid. A limited amount of earthworks for the processing plant and portals for underground declines was also done.

More than 90% of Mayskoye ore is refractory and requires special pre-treatment to achieve acceptable recoveries. The refractory nature of the deposit is the main reason for the failure of many attempts to develop the asset. Extensive test work has been performed on Mayskoye ore confirming the technical feasibility of both biological oxidation (BIOX) and pressure oxidation (POX).

Polymetal plans to revise the feasibility study based on a different flowsheets. Polymetal intends to drastically reduce the capital expenditure (“CAPEX”) requirement by eliminating the oxidative pre-treatment at a remote site. The Company plans to produce gold concentrate at Mayskoye with this material seasonally shipped to Amursk for POX treatment and production of Dore metal. The Amursk POX facility has been designed to be able to accommodate additional concentrate tonnage.

The cost of transporting concentrate from Mayskoye to Amursk (180 kilometers by truck to Pevek and 4,800 kilometers by sea and river from Pevek to Amursk) will be more than compensated by a significant fall in concentrate treatment cost at Amursk compared to Pevek thanks to cheaper energy, labor and consumables. POX recovery is also expected to be 2-3% better compared with BIOX. Processing Mayskoye concentrate at Amursk will validate the Company’s fundamental strategic idea of making Amursk the processing hub for refractory gold concentrates from all over the Russian Far East.

At the beginning of the 2010 at Mayskoye underground ramps successfully accessed first production level. Ongoing in-fill drilling confirmed continuity, grade, and thickness of main ore bodies. Construction of water reservoir and tailings impoundment has started. Certain large-ticket long-lead equipment items have been contracted, including SAG mill and underground mining fleet.

Polymetal plans the following milestones for the development of Mayskoye:

• Reserve estimate and revised feasibility study – Q3 2010
• Resumption of construction – Q3 2010
• First concentrate production – Q4 2011

Personnel (Maiskoe Gold-Mining Company LLC, 31.12.2009) - 322 persons.